Summary
VW is back in business: in the first quarter of 2008 the car maker increased earnings by 21% compared to its record year of 2007. Porsche’s CEO Wendelin Wiedeking would like to bring Volkswagen back to the top – and VW’s plan is to beat Toyota's leadership with in growth, quality and global production.
After serious problems with corruption and a damaged image, VW Brand manager Wolfgang Bernhard managed to accelerate and optimise the manufacturing process, with the result that the new Tiguan was brought to market faster than any other VW model. Standardised construction kits should help save costs and enable the production of more niche models. According to Sales director Detlef Wittig, 20 new models are to be launched before 2010.
Is the idea to beat Toyota just crazy or a sign of intelligent strategy? Automotive expert Engelbert Wimmer of PA Consulting Group says that the opportunity to beat Toyota has never been better.
VW needs to close the gap between itself and Toyota in number of car sales, which is about 2.5 million cars at the moment. The main obstacle to growth is its relative lack of penetration in the US. Engelbert Wimmer says that VW has lost billions on the world’s biggest automotive market, whereas Toyota has earned money.
VW’s potential for improvement is enormous says Engelbert Wimmer: “The company needs to outsource a great part of its production and thereby release resources to strengthen its core business and growth." The diversity of VW's models and brands gives it a competitive advantage. However, VW should not underestimate Toyota, because the Japanese car maker keeps on following its sucessful strategy of growth.
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